Delayed recovery: A file picture showing a customer walking behind a sign at a departmental store in Florida. The firm expects spending on some services and non-durable goods to stay persistently below pre-pandemic trends. — AP
NEW YORK: Goldman Sachs has cut its US economic growth target to 5.6% for 2021 and to 4% for 2022 citing an expected decline in fiscal support through the end of next year and a more delayed recovery in consumer spending than previously anticipated.
The firm has previously expected 5.7% gross domestic product (GDP) growth in 2021 and 4.4% growth in 2022, according to research released on Sunday from authors including its chief economist Jan Hatzius.
They pointed to a “longer lasting virus drag on virus-sensitive consumer services” as well as an expectation that semiconductor supply likely would not improve until the first half of 2022, delaying inventory restocking until next year.
And on top of the near-term virus drag, they also expect spending on some services and non-durable goods to stay persistently below pre-pandemic trends especially “if a shift to remote work results in some workers spending less overall.”
On a quarterly basis Goldman cut both its fourth-quarter 2021 and first-quarter 2022 GDP estimates to 4.5% from 5% and shaved its second quarter 2022 estimate to 4% from 4.5% while reducing its third quarter estimate to 3% from 3.5%.
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